Force10 Adds SONET/SDH Support to Its E-Series Routers - Looking More Like an IP Core Router

| July 26, 2006 | Carrier Infrastructure |Competitive Intelligence Report |

Analyst: Glen Hunt

Current Perspective: Positive
Vendor Importance: High
Market Impact: Moderate

Event Summary

On July 24 Force10 announced the addition of multi-rate packet over SONET/SDH (POS) capabilities to its TeraScale E-Series family of switch/routers. The new POS functionality is aggressively priced at approximately $25K per port which significantly reduces the cost to bridge between an existing SONET/SDH architecture and a more cost effective Ethernet infrastructure. Force10 now enables service providers to leverage their past POS investments while investing in new Ethernet infrastructures.

Analytical Summary

• Current Perspective: Positive on Force10’s addition of Packet Over SONET (POS) interfaces to its E-Series router. The addition of SONET capabilities provides service providers a viable alternative to migrate legacy SONET networks to a more cost effective Ethernet infrastructure. The new capability adds a multi-rate OC-3/OC-12/OC-48 POS interface at a list price of $25,000 (U.S. List) per port, which represents a very aggressive price position for a carrier grade solution.

• Vendor Importance: High to Force10, since the addition of the POS interfaces positions the E-Series to address applications beyond pure Ethernet. The E-Series can provide a lower-cost alternative to expand legacy SONET/SDH network capacity by leveraging strong Ethernet economics. The move furthers Force10’s ability to move into more network opportunities at a lower cost point than would be possible on traditional core and edge routers.

• Market Impact: Moderate on the market, since the E-Series can now be leveraged to address legacy network migration where Force10’s historical strength has been in pure GigE and 10 GigE applications, ISPs, and super computing environments. The addition of POS capabilities positions the E-Series routers to perform the chores of an IP core and edge router rather than just an Ethernet switch and aggregation platform.

Recommended Competitor Actions

• Alcatel should quickly show its market momentum with the 77X0 IP product portfolio, which not only touts carrier grade attributes, but cost optimized Ethernet and multiservice interfaces such as POS and ATM.

• Cisco should point out that the CRS-1 and the 12000 series IP core routers have had POS interfaces since their inception, and point to its recent enhancement to its Ethernet capabilities on the 7600 edge router.

• Juniper should point out that its M and T series routers have the requisite features and interfaces to lead cost effective network migrations. Juniper can also point out that its second generation Ethernet technology addresses not only cost, but provides very granular QoS and the ability to oversubscribe Ethernet interfaces to achieve CapEx objectives.

• Foundry should contrast the capabilities of its XMR series Internet routers with those of the Force10 E-series, and point out that it has SONET/SDH interoperability through its 10-GbE WAN PHY interface. Foundry should also contrast its flagship XMR 32000, which touts up to 2 Bpps per system and offers MPLS signaling and path calculation algorithms for both traffic engineered and non-traffic engineered applications. This compares favorably with the E-series, which supports 1 Bpps per system, with MPLS as a roadmap item.

Recommended End User / Customer Actions

• Service providers with SONET/SDH networks should carefully evaluate the new offering from Force10, since it could change the CapEx dynamics considerably if additional capacity is needed and they are migrating toward an Ethernet-based infrastructure for their next generation network.

• Service providers using traditional edge and core routers from Cisco, Juniper, and Avici should press their respective suppliers to better per unit prices on their OC-3 – OC-48 POS interfaces.

• With the next generation of IP core routers emerging from the likes of Force10 and Foundry, service providers should carefully consider the merits of using this next generation technology in their evolving network blueprint. With advances in hardware and programmable silicon, these next generation platforms could significantly change the traditional edge and core router cost/performance model. These same service providers should be cautious to understand any trade-off in features and capabilities offered in lieu of the battle tested platforms from the market leaders.

• Service providers seeking to upgrade their networks should seek to gain further insight into Force10’s long-term plans, since most investments will represent a multi-year equipment life cycle and they need to protect themselves from unexpected corporate and/or product consolidation.

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